Nationwide expects further house price falls

Permalink: Nationwide expects further house price falls
by Kay Murchie

The Nationwide, Britain’s largest building society, said today it expects house prices to continue falling into next year and possibly 2010.

Nationwide’s chief executive, Graham Beale, is expecting a peak to trough decline of 25%.

The announcement comes after the Society reported that underlying pre-tax profits for the half-year to the end of September were down 18% to £322 million.

The building society also reported that its share of the UK’s net lending mortgage market has fallen to 5.6%, from 6.2% a year earlier.

According to the Nationwide, the housing market will continue to remain subdued, with prices continuing to fall into next year and possibly the year after.

However, it did add that falling house prices would improve affordability, improving prospects for first-time buyers.

Last month, Nationwide said house prices in the UK have now fallen for the twelfth consecutive month.

The building society’s latest survey has revealed that property prices fell by 1.4% in the last month, taking the annual rate of fall up from 12.4% to 14.6%.

As a result, £27,000 has been wiped off the value of a property, taking the average cost of a home to £158,872.

There have been many reports recently predicting house prices. Last month, Knight Frank estate agents said house prices in the UK will fall 30% from their high of summer 2007 and fall to levels seen in September 2003.

Meanwhile, economic forecasting agency, Capital Economics, are predicting that house prices will fall 35% by next autumn, from their peak of last summer.

Furthermore, the Centre for Economics and Business Research (CEBR) has predicted that house prices will fall in value by 25% from their peak. The organisation believes that house prices will not recover to the levels they peaked at in 2007 until 2013.